How To Get Out Student Loan Debt
It’s not always easy to get out of student loan debt. But it is possible! And the more you know about how student loans work and what your options are, the better chance you have of getting out from under them. Here are some tips on how to get rid of those pesky monthly payments:
You have to pay them back. Yes. Every. Single. Dollar.
If you borrowed money from the government, you will have to pay them back. Every single dollar. You can’t just refuse to pay them back. In fact, there are very strict laws that make it illegal for you not to pay them back. If you don’t pay them back, they’ll put you in jail or garnish your wages until they get their money plus interest out of your paycheck or bank account (like what happened with my mom).
You have to know how much you owe first.
The first step to getting out of student loan debt is knowing how much you owe. It’s important to know what type of loan you have, who your servicer is and the term length of your loans. If a student has several different federal and private student loans, it can be difficult to keep track of all your payments and balances.
The second step in the process is researching which repayment plan will help you pay off those loans faster while still maintaining steady payments that won’t shock your budget later on. Each plan has its own requirements for eligibility; some require certain credit scores or offer only certain benefits depending on when the borrower took out their initial loans.
You have to know who the servicer is.
The first step is to figure out who your servicer is, which can be a little tricky. If you’re currently enrolled in federal student loans, it’s possible that the Department of Education will collect on these debts while they are in repayment status. However, most people have private student loans and these will likely be managed by an institution like Sallie Mae or Discover Financial Services.
Once you know who your student loan servicer is, ask them how to make payments (you will almost certainly need to go through the phone or email). Most importantly, find out whom you should contact with any issues related to your bill so that when things go wrong (and they will), there’s no question where to turn for help
Know the term length of your loans
Knowing the term length of your loans is essential to understanding how long you’ll be in debt, and when you can expect to be debt-free. Here are some ways to figure out the term length of your student loans:
- Look at the promissory note from your lender. The promissory note outlines all of the details, including when payments are due and what happens if they aren’t paid on time.
- Check with a customer service representative at your lender or servicer (the organization that handles billing). They can give you more detailed information about how much interest has accrued, how much will be due each month, and other details about repayment plans available to borrowers.
- Use financial calculators designed specifically for this purpose. These tools allow users to input their loan information and answer simple questions about their income level before calculating an estimated monthly payment amount based on federal guidelines set by Congress in 2014 (this was prior legislation from 2007 that was amended).
You have to know what type of repayment plan you’re on (IBR, PAYE, etc.)
If you’re not sure what type of repayment plan you’re on, it’s worth checking. There are three main types:
- Standard 10-year repayment plan
- Graduated repayment plan (also known as “income-contingent” or “income-based”)
- Extended repayment plan (it takes more than 10 years to repay your loan)
You can figure out which one applies to you by looking at your loan servicer website or calling them directly and asking them what type of repayment plan you’re on. If that doesn’t help, log into the Department of Education website and look at the status of your loans; they’ll tell you what type of repayment plan is right for you here: https://studentaid.ed.gov/sa/repay-loans/understand/plans
You have to set up an automatic payment plan.
One of the best ways to tackle student loan debt is through an automatic payment plan. Automatic payment plans are easy to manage, maintain and budget for; they’re also easier to keep track of and stay current on your payments. You can’t afford to let any money slip through the cracks when it comes to paying down your student loans: these debts have interest rates that add up quickly, so you’ll want to make sure you’re making timely payments every month until they are completely paid off.
Take advantage of any tax incentives available for student loan borrowers.
- Refinance your student loans. If you have federal student loans, you may be able to refinance them and lower your monthly payments by consolidating multiple federal loans into one new loan. The average borrower who refinanced their higher education debt in 2017 saved around $5,000 over the life of their loan, according to Student Loan Hero.
- Choose the right repayment plan for you. It’s important to understand which repayment plans are available to help you manage both federal and private student loans. You may qualify for income-driven options that can lower monthly payments based on how much money you earn each month (and how much debt you carry).
- Use the IRS’ repayment estimator tool before making any final decisions about paying off your debt early or not being able to afford making additional payments later on down the road when interest starts accruing again after a certain number of years pass by with no additional payments made towards principal balance owed against any outstanding balance owed from previous years’ balances owed yet still currently owe today – present day value amounts owed today – present day value amounts owed today – present day value amounts owed today – present day value amounts
Shift your mindset around money and student loans, especially if your debt feels overwhelming or debilitating.
- You will never get out of debt if you don’t make a plan. Your first step is to figure out exactly how much debt you have, and how much it’s costing you each month.
- Be realistic about your goals. Are you planning on buying a house in two years? Are there ways to make that happen sooner? Will the career path you’ve chosen pay off in the long term? These are all questions worth asking, because they point towards some real-world solutions that can help get student loan debt under control faster than anyone would imagine possible.
- Be prepared to make sacrifices—big ones! If there are things missing from your life due to student loan payments (drinks with friends, travel plans), then consider ways of making up for those losses by cutting back elsewhere or working extra hours when possible.
- Be willing to work hard—harder than ever before! It’s easy as college graduates who are just starting out think their best days are behind them; however this couldn’t be farther from the truth: after all we’re still young! We’ll always find ourselves surrounded by people who want our jobs more than anything else on this planet; therefore getting ahead requires more hustle than ever before!
The more you know about your debt, the more you can take control of it!
- Know how much you owe and to whom.
- Understand your repayment options.
- Get familiar with tax incentives for student loan debt.
- Shift your mindset if necessary, because this isn’t just about the numbers—it’s also about being able to live a more balanced life than what we’ve been taught in school and society!
If you take the time to learn about your debt and how to manage it, you’ll be in a much better position. You can pay off that student loan faster and with less stress than ever before!